As per Lawkidunya, In Pakistan, agricultural income is exempt from income tax under certain conditions. Here are the details:
Exemption of Agricultural Income
According to the Income Tax Ordinance, 2001, agricultural income is exempt from tax if it meets the following conditions:
1. Definition of Agricultural Income: Agricultural income means any income derived from:
– Cultivation of land
– Production of crops
– Raising of livestock
– Dairy farming
– Poultry farming
2. Land Ownership: The land must be owned by the taxpayer or leased by the taxpayer for a period of not less than 3 years.
3. Location of Land: The land must be located in Pakistan.
4. Income from Agricultural Land: The income must be derived from the agricultural land, such as:
– Sale of crops
– Sale of livestock
– Sale of dairy products
– Sale of poultry products
Conditions For Exemption
To qualify for the exemption, the following conditions must be met:
1. Gross Receipts: The gross receipts from agricultural income must not exceed PKR 1.2 million (approximately USD 7,500) in a tax year.
2. Taxpayer’s Status: The taxpayer must be an individual, an association of persons, or a company.
3. Compliance with Tax Laws: The taxpayer must comply with all tax laws and regulations, including filing of tax returns and payment of taxes.
Limitations and Exceptions
1. Limit on Exemption: The exemption is limited to PKR 1.2 million (approximately USD 7,500) in a tax year.
2. Exception for Companies: Companies are not eligible for the exemption if they are engaged in agricultural activities as a business.
3. Exception for Non-Residents: Non-resident individuals and companies are not eligible for the exemption.
References
– Income Tax Ordinance, 2001
– Federal Board of Revenue (FBR) Website
– Pakistan Tax Laws and Regulations
Note: The information provided is based on the current tax laws and regulations in Pakistan. However, tax laws and regulations are subject to change, and it’s always recommended to consult a tax professional or the Federal Board of Revenue (FBR) for the latest information and guidance.